Fidelity Bonds and Crime Policies
The fiduciary insurance experts at Euclid Specialty have designed a crime insurance policy expressly for employee benefit plans. Most employee benefit plans are required to purchase a fidelity bond. But not all bonds meet the stringent standards of the Employee Retirement Income Security Act (ERISA) because they are designed for generic risks. And not all policies have the necessary coverage for today’s electronic world. Some bonds fail to cover all necessary parties, and other bonds fail to provide full coverage for fraud and dishonesty as required by ERISA. Trustees of benefit plans and their insurance professionals can be confident that Euclid’s crime policy has been designed by insurance experts who understand how to comply with complex ERISA and other fiduciary laws.
Product & Program Highlights
- Whereas many crime policies only cover employees for employee theft, “employee” is broadly defined in the Euclid policy to include “any other natural person who handles Employee Benefit Plan assets, whether or not required to be bonded…” This is the broadest scope of coverage available in the market.
- Coverage is provided beyond standard “employee theft” language to cover “fraud or dishonesty” that meets the ERISA standard.
- No Retention for ERISA Plans for Employee Theft.
- Additional coverage available beyond the typical fidelity bond for:
- Forgery or Alteration
- Inside and Outside the Premises – Money, Securities and Other Property
- Computer and Funds Transfer Fraud
- Money Orders and Counterfeit Currency
- Coverage for Fraudulent Transfer Instructions. Policy responds to fraudulent electronic instructions purportedly authorized by an Insured by have been fraudulently transmitted by someone else.
- Policy reimburses the Insured for Investigative Expenses incurred in establishing the existence of any direct loss up to $5,000
- Policy limits available up to $1 million. ERISA requires plan officials to be bonded for at least 10% of the funds handled up to $500,000. Plans holding employer securities are required to maintain a $1,000,000 limit.
- Crime policies are offered with Euclid’s Vanguard Fiduciary Liability Insurance policy for comprehensive protection of employee benefit plans.
- Our Carrier: Policy offered on admitted basis, 50 state availability, through Hudson Insurance Company, one of the most dedicated carriers for employee benefit plans. Hudson has an A.M. Best rating of “A” (Excellent), financial size category XV ($2.0 billion or greater) and is a Department of Treasury approved surety.
- Eligible accounts include multiemployer, governmental and other labor entities and non-profit benefit plans requiring a bond.